One scoop to start: Private equity groups Advent International and Platinum Equity have purchased $2 billion worth of assets from DuPont, including the Chevlar Bulletproof brand, and the chemical giant is undergoing a wider division.
Another: The Apollo-backed insurance group is approaching the £6 billion acquisition of a UK-based pension insurance company.
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In today’s newsletter:
KKR vs Advent Deal Battle in the UK
It is rare to see two private equity bidders compete head-on for a acquisition agreement in the UK public market.
But that was in the news that Wednesday began in London and KKR surpassed a bid from rival Advent International on a £4.7 billion deal to acquire the listed industrial group Spectris.
The unanimous agreement on the Spectris board of directors KKR’s acquisition agreement outweighs the previously negotiated £4.4 billion acquisition announced last month.
Spectris, which manufactures high-tech instruments for a variety of industries, is a typical target for British acquisition companies. The latest traded sideways is the components of the glorious FTSE 250.
Private equity dealers are looking for targets in the UK’s public middle market. There, it becomes easier to find deals that are more attractive than other buyout fund portfolios.
Spectris was on the deal maker’s radar, but Advent was surprised at a deal representing an 85% premium on the company’s stock price before its interest first appeared. KKR’s new acquisition agreement represents a 96% premium.
KKR has increased its activity in the face of recent market turmoil, with one of its senior dealers previously saying that Europe is currently experiencing a revival as its investment destination.
Tara Davis, co-head of Europe at KKR, told DD’s Alexandra Heal in April.
The US acquisition company pursued several deals in the weeks since Donald Trump’s so-called release date tariffs were announced, but some were not realized. Recently, they left the high-profile £4 billion rescue contract of Thames Water, the UK’s largest water company.
I was also about to buy the listed NHS landlord Assura. However, Assura has switched its recommendation from its rival primary health characteristics to a higher offer in recent weeks.
KKR is definitely pleased to be a person who’s piping.
Thiel Backed Bros builds SVB rivals
The collapse of Silicon Valley Bank in 2023 has hit the body to US tech startups, leaving many fledgling investors over the past 20 years without access to capital to support the industry boom.
Large lenders such as JPMorgan and newcomers like First Citizens, which have rebooted SVB, have tried to fill the gap in the two years since.
According to DD’s Tabby Kinder, a group of billionaires, including Peter Thiel, are currently trying to launch their own successors.
The Thiel’s Founders Fund, along with his Anduril co-founder Palmer Luckey and Palantir co-founder Joe Lonsdale, are working together to launch and invest in a bank named Elebor, named after the famous “solid mountain” on the road of the ring.
It hopes to become a lender for riskier companies and crypto groups that may be rejected by rarer institutions.
The bank’s charter application said it will target the “innovation economy” with a focus on cryptocurrency, artificial intelligence, defense and manufacturing.
These are areas of special interest to the group behind the bank. Lonsdale, Luckey and Thiel have long-standing cryptography advocates, while Anduril and Palantir are both defense technology contractors.
The co-founders of Erebor first discussed launching a bank after the end of SVB. Its appearance will likely come as welcome news for early stage businesses and venture capital supporters where SVB has become famous.
Wall Street did its best to get a slice of pie after the valley-based bank collapsed, but it didn’t match the charm of the old SVB.
Lucky and Lonsdale are not expected to be involved in the day-to-day operations of the bank. Instead, it will be run by CO-CEOS Jacob Hirshman and Owen Rapaport.
Hirschman previously worked as an advisor to Crypto Group Circle, while Rapaport is the CEO of AER Compliance, the digital asset software company he co-founded.
DD hopes replica SVBs handle asset solubility management and potential inconsistencies to better handle than the original.
Private Equity M&A Rollups reach Silicon Valley
Venture capital companies are getting pages from private equity playbooks and charging startups with cash to achieve scale.
This is a strategy that has long been used by PE companies to build conglomerates the industry, but marks a new turn for venture capitalists.
Take Thrive Capital, the group best known for supporting Openai and Stripe. It is involved in a $72 million funding round for savvy wealth, a startup in asset management.
That cash is used to purchase small advisory companies, hire individual advisors, and integrate AI into the operation of the platform.
And Thrive is not the only one. Another major VC, General Catalyst, has set aside $750 million as part of its plan to roll up call centers, legal services companies and real estate rentals.
Other groups investigating the strategy include Khosla Ventures, Bessemer Venture Partners and 8VC.
The so-called rollup offers VCS the opportunity to breathe new life into a wave of emerging investment that has not fully expanded in the 2021 and 2022 Go-Go years.
Of course, venture capital investors are pinning roll-up plays to Hot Item Du Jour: Artificial Intelligence.
PE rollups often focus on an astonishing wave of debt-funded transactions and reduction costs, but venture capitalists want to use AI to achieve efficiency and higher margins.
Not everyone is sure.
“I am skeptical of any strategy that includes converting pre-AI businesses into AI-based businesses,” said the US Foundation Investment Director.
He told DD’s George Hammond that the strategy “needs to have a company equivalent to brain transplantation.”
Job movements
Goldman Sachs has appointed Raghav Maria as chairman of the investment bank. He will also continue as co-head of M&A in Asia Pacific and head of TMT Group in Asia Pacific.
Davis Polk has selected seven new partners.
Kevin Fromer, president and CEO of the Financial Services Forum, announced his plans to leave the organization. He continues until a successor is appointed.
Stephen Kelly will join Guggenheim Partners as an advisor to top bankers Alan Schwartz and Jim Millstein. Kelly will be taking part from the Yale program on financial stability.
The Chatterjee Group has appointed Jeremy Ghose as president. He was previously a partner and CEO of InvestCorp Credit Management.
Smart Lead
Nike sales fell at the second fastest rate in history last year. Rex writes that repairs from trainer manufacturers will be a marathon rather than a sprint.
JPMorgan’s Dark Arts Warner Bros Bankers knows that the split will boost creditors and have come up with a strategy to force them into contracts, Bloomberg reports.
What is Trump’s Money President’s net worth? Here’s what we know from the latest disclosures via the New York Times:
News Round Up
Paramount agrees to a $16 million settlement in Donald Trump’s lawsuit against CBS News (FT)
As investors cut our exposure, a hit record for sales of European junk bonds (FT)
Ey has broken audit rules for Shelman Dating for the second consecutive year (FT)
Investors Are Worried about AstraZeneca US Move (FT)
Germany says new banking rules can strike European defence spending (FT)
UK City Watchdog is expanding rules regarding bullying and harassment (FT)
Hong Kong Real Estate Group stocks jump after $11 billion debt transaction (FT)
When patient care costs jump, health insurance companies’ stocks drop sharply (FT)
Bumble Chief criticizes staff for “going crazy” over job cuts (FT) in London
Microsoft cuts staff 4% with layoffs New Wave (FT)
Due Diligence is written by London’s Arash Masdi, Ivan Levingston, Ortenka Ariazi, Alexandra Heal, Robert Smith, James Fontanella Khan, Suzeet Indup, Eric Pratt, Antoine Gala, Amelia Maria Pollard, Maria Hater, Kay Wiggins, Oliver Burns in Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Hannah Han Francisco, Arjun Neil Alim of Hong Kong. Send feedback to due.diligence@ft.com
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